<div>India announced new rules on Friday making it compulsory for sugar producers to ramp up exports to at least 4 million tonnes in the forthcoming crushing season, to cut stockpiles as the country is set to produce a surplus for a sixth straight year.</div><div> </div><div>India is the world's biggest sugar producer after Brazil and much higher exports would help clear huge sugarcane dues to farmers. But it would also add to a global glut and could further depress prices, which are languishing at seven-year lows.</div><div> </div><div>The new crushing season starts on Oct. 1. In the current season, India exported 1.3 million tonnes.</div><div> </div><div>Abinash Verma, director general of the Indian Sugar Mills Association (ISMA), said producers wouldn't be able to export a combined 4 million tonnes unless they receive more government help.</div><div> </div><div>For many producers in India, the world's biggest consumer of sugar, exports are not viable because global prices are lower than local prices, he said.</div><div> </div><div>Sugar prices in India are trading nearly a fifth higher than global prices due to a government decision to raise cane prices, to support farmers, which has pushed up production costs.</div><div> </div><div>The government approved a subsidy of 4,000 rupees ($60.86) per tonne for exports of raw sugar in the current marketing year ending on Sept. 30, but has not said whether it will continue the subsidy after September.</div><div> </div><div>Many mills could not produce raw sugar for exports this year because the decision on a subsidy had been delayed until February.</div><div> </div><div>Verma said the planned increase in exports will push up sugar prices in India, which jumped 2 percent after the announcement.</div><div> </div><div>India is likely to start the 2015/16 season with carry forward stocks of 10.2 million tonnes and is expected to produce 28 million tonnes of sugar against local demand of around 25.2 million tonnes, estimates ISMA.</div><div> </div><div>India's food secretary said last week the government was working on a multi-year plan to boost sugar exports, targeting markets in Africa, China and neighbouring countries, confirming a Reuters report last month.</div><div> </div><div>Sugar producers must report their exports to the government, which has the power to act if export rules are violated.</div><div> </div><div>The new export requirement will quickly bring down inventories, which have been rising, the Mumbai-based head of a global trading firm said, on condition of anonymity.</div><div> </div><div>"The government should also make it clear whether it is going to extend the subsidy for next season's exports. It will help mills in signing deals in advance," he said.</div><div> </div><div>(Reuters)</div>
